The retailer's losses grew nearly 5% to $607 million in the fourth quarter, and same-store sales, or sales at stores open at least a year, fell 10.3%.

But the company's adjusted loss was smaller than last year as Sears more closely managed its inventory and costs, which cheered investors and sent the stock climbing more than 5%.

One analyst says there's no reason to celebrate, however.

Neil Saunders, CEO of retail consulting firm GlobalData Retail, says Sears is in a permanent death spiral and that none of the actions it's taking today — such as launching a new Mastercard that allows customers to earn Sears loyalty points everywhere they buy — will help the company turn business around in the longer term.

"They do nothing to resolve the broken proposition at Sears," he wrote of the actions Sears is taking in a note to clients. "As such, they are, in our view, akin to taking an Advil to cure a heart attack."

He said Sears' stores are in disarray with a product mix and "general approach to retailing" that deters customers from visiting. He also highlighted that operating losses grew to nearly $2 billion for the full year, and that net losses now total $2.2 billion.

"Not only do these staggering figures fail to show even the faintest glimmer of improvement, but they are also a clear symptom of a business that is broken and now well beyond repair," he wrote.

A Sears store in Richmond, Virginia.
Business Insider/Hayley Peterson
Sears attributed its fourth-quarter sales declines to a "challenging" holiday season and highlighted the measures it's taking to revive business, including the new Mastercard and a partnership that rewards people with Sears loyalty points for taking an Uber.

"We continue to sharpen our focus on profitable areas of our business to improve our financial performance and long-term competitiveness," Sears chief financial officer Jason Hollar said in a pre-recorded call on the company's earnings.

Sears also highlighted the sale of its Craftsman brand to generate liquidity.

"The transaction delivered significant value for Sears Holdings, while facilitating the future growth of the Craftsman brand in and outside of our shopping platforms," Sears CEO Eddie Lampert said in a letter to employees on the earnings results.

Saunders argues, however, that the sale of Craftsman and Sears real estate "is little more than a short term survival tactic, where funds raised are used to prop up a failing business rather than generate long term growth."

"A further issue is that the company's asset base is being diminished at a time when total long-term debt has risen from $2.2 billion to $4.2 billion," he wrote.

Business Insider/Hayley Peterson
Sears said it has plenty more assets to draw from. The company also hinted that it will likely close additional stores to cut costs.

"We have a valuable real estate portfolio, which at the end of the fourth quarter comprised 1,050 leases with significant optionality, as well as 380 owned stores, many in prominent locations," Hollar said. "We will continue to assess opportunities to right-size our store footprint and inventory levels aligned to our ongoing transformation to an asset-light integrated retail model."

Sears is currently in the process of closing 150 Sears and Kmart stores. The closures will be completed by the end of the first quarter.